Legal: Comcast of Florida LP v. L’Ambiance Beach Condominium Association, Inc.
Comcast of Florida LP v. L’Ambiance Beach Condominium Association, Inc.
17 So.3d 839 (Fla. 4th DCA 2009)
The ability for condominium associations to terminate certain contracts using a statutory procedure is at the heart of THIS CASE. In 2002, Comcast of Florida, L.P. (“Comcast”) entered into an agreement with the condominium developer (on behalf of the Association) that granted Comcast an easement to install cables and offer cable television services to residents at a bulk-discount rate. Every unit owner received and paid for the cable service as part of a monthly maintenance fee. The termination provision in the agreement stated it would be subject to the conditions and regulations required under Chapter 718, Florida Statutes. Following turnover from the developer to the unit owners, the Association voted to terminate the agreement and sent written notice to Comcast in accordance with F.S. 718.302.
Section 718.302, Fla. Stat. (2002), provided in part:
(1) Any grant or reservation made by a declaration, lease, or other document, and any contract made by an association prior to assumption of control of the association by unit owners other than the developer, that provides for operation, maintenance, or management of a condominium association or property serving the unit owners of a condominium shall be fair and reasonable, and such grant, reservation, or contract may be canceled by unit owners other than the developer:
(a) … the cancellation shall be by concurrence of the owners of not less than 75 percent of the voting interests other than the voting interests owned by the developer….
After receiving notice of the termination, Comcast refused to open the distribution lock boxes. Ultimately, Comcast sued for declaratory and injunctive relief for breach of contract and trespass. Before a hearing was held, the Association hired another provider to rewire the building and provide services to all residential units. The trial court ruled in favor of the Association. On appeal, Comcast argued that F.S. 718.302 did not apply to Comcast’s services, because the contract was not one for operation, maintenance, or management of the condominium as required under the statutory language.
On appeal the Fourth District Court of Appeal found that the agreement explicitly required Comcast to operate and maintain the wires and lock boxes it had installed. The Court also noted that under F.S. 718.115(1)(d), the cost of cable television service obtained pursuant to a bulk rate contract is deemed a common expense. In light of the fact that the agreement provided for a cable television service, and that the cost was part of a monthly maintenance fee, and that Comcast was required to service and maintain the cable television, the Court concluded that the agreement was one for “operation, maintenance, or management” subject to F.S. 718.302 (NOTE: the 2021 version of this statute is substantially the same as the 2002 version).
So why does THIS CASE matter? The Florida Condominium Act provides various rights to condominium associations which become effective upon turnover of the association from developer-controlled to unit owner-controlled, including, but not limited to, the ability to terminate certain contracts. It is vital for associations which recently have undergone turnover to discuss the various rights which accrued on the date turnover with the association’s legal counsel.
Tags: Condo and HOA Laws, Developer Issues